The Guardian: Shell's £1m goodbye for ousted Watts
Saturday June 26, 2004
Sir Philip Watts, ousted as chairman for his role in Shell's reserves fiasco, yesterday celebrated his 59th birthday with a £1.06m severance package.
Shell, facing a stormy annual meeting on Monday, said Sir Philip was being paid his basic salary from the day he resigned in March to what would have been his retirement at the end of June 2005.
But Sir Philip could yet face legal action for damages from his former employer if any of five separate investigations by regulators prove wrongdoing during the reserves debacle.
He is one of an array of current and former Shell directors named in a multibillion-dollar class action by two big American blue collar staff pension funds accusing them of breach of fiduciary duty, fraud, mismanagement and unjust enrichment.
The latest American lawsuit comes in the wake of investigations by the US department of justice and the securities and exchange commission, Britain's Financial Services Authority, Dutch watchdog AFM and Euronext, the Amsterdam stock exchange.
Shell has been forced to downgrade its proven oil and gas reserves four times this year, reducing them by 4.5bn barrels or 23%.
Sir Philip, who had been at Shell for 35 years, gets an immediate pension of £584,070 a year and could raise a further £150,000 now by exercising options on 309,000 shares.
The former chairman, who was paid no bonus last year when his pay halved to £865,000, is sitting on 2.8m share options whose term has been shortened to five years from the date of his ousting.
While his 2001 options under a long-term incentive scheme were forfeited last year, he has a further 885,000 awarded in 2002 - of which around half could lapse.
Shell said it was still in talks with Walter van de Vijver, ousted head of exploration and production, and Judy Boynton, former finance director, over their severance packages. Ms Boynton, who still works for Shell as an adviser, is entitled to at least $1m (£550,000) if dismissed "for reasons other than gross misconduct".
Monday's annual meeting is expected to see shareholders up in arms over Shell's recent performance and its dual-headed corporate structure based in London and The Hague. US asset manager Knight Vinke, acting with Calpers, the California state pension fund, which wants a single board, has criticised Shell's lack of transparency.
Shell said a review of its structure would be completed in November, discussed with shareholders and then submitted as a revised scheme to next year's annual meeting.